Protecting the petrodollar: America gears up for a long war

[Robert2006]

I believe it's more about protecting the Dollar than about oil. In my opinion the US is primarily concerned with trying to maintain the Petro Dollar hegemony. The US Dollar, by OPEC treaty is used by the world as the settlement currency for buying and selling oil, it creates a constant demand for Dollars and that is a great benefit to the US. The BRICS nations (Brazil, Russia, India, China and S. Africa) are now using offsets to settle their oil purchases (trading one commodity for another) and settling any discrepancies at the end of the year in gold.

Spot on so to speak. The First Gulf War was initiated after Saddam threatened to sell his oil outside the Petrodollar. It was not some unintentional gaff that encouraged Saddam to invade Kuwait. This is not just about the US, but also the "global" financial market in general, the bankers, who have all bought into the Petrodollar as the medium of international exchange. And even the Chinese don't want the Petrodollar threatened as it would greatly depreciate the money owned to them as US debt.

Yes I agree the western central banks control the global financial markets, the Petro Dollar has been the primary tool used by the banking cartel to consolidate international power and control, disturb the Petro Dollar dominance and bear the wrath of the banker’s security force, the US Military.

The bankers have skillfully and incrementally created a scheme that gives them the unlimited power to create fiat currency, debt based currency created out of thin air that they can loan at interest. They are very powerful, the most powerful individuals on the planet and they will not give up the power to create fiat currency without a fight.

Currently the Petro Dollar the crown jewel of all their currencies is being “disturbed” and the bankers are not happy, this situation makes the world a much more dangerous place.

[Asiantravel]

Robert its a relief to know that at least one other person doesn't think it's good that so many in USA are living this way. Sometimes I think F430murci is having everybody on because I can't believe he would seriously condone the continuation of this very troublesome trend and see it as something to cheerlead about.

And I would also be interested to read his interpretation of the US debt which I must have missed because I haven't seen it in any other thread.

Haha, you guys lack knowledge and ability to research. I should charge for this or you should go to a business school, get an MBA or something if you really wanna know.

First, I do not like having to pay for and Cary dead weight (entitlement people), but I said it is hard for me to legitimately complain about amount of taxes I pay because I have been given opportunity to make enough to pay such a large amount of taxes.

Debt (abbreviated version)

Public debt is the important number. US public bedt is somewhere around 12.5 or about 75 % percent of GDP which is safe and acceptable ratio. 90% ratio is critical stage for developed, 70% ratio is critical stage for emerging market countries.

Our politicians and everyone with some business sense knows that public debt is the important figure, but media and politcak pundits throw around total US or national debt to rally base.

Public debt is a great means to get extra funds to invest in their economic growth. Public debt is a safe way for foreigners to invest in a country's growth by buying government bonds. This investment allows US to generate economic growth internally.

Our T bills are in demand because they are safer than other investment alternatives to countries needing returns, but safety for large cash reserves. Other countries need, are dependent upon dependent and rely upon the availability of US debt for their own economic issues. I explained this and public v, nation ad naseum in other posts.

BTW, you unemployment figures are comparable to the use of national instead of public debt to create confusion and alarm. Yep, many 16 to 18 year olds and college age children are not having to work now and are focusing on education. This is a positive families are in the position now. Older Americans who suddenly had to supplement their 2008 investment:retirement losses in 09, 10 and 11 no longer are seeking employment because their pensions are back to and above 2007 levels. This is a positive.

Things are fine and will continue to be fine.

you can't fuel an economy on debt

And here I'd thought Herbert Hoover was dead

He did pass on actually, 1963 or 1964 it was.

So now Herb speaks as a voice from the grave.

Another whack a mole.

USA's promised entitlements dwarf the ability to fund them many times over. There's really not much more to say .

[F430murci]

F430murci

I covered US debt ad naseum in another thread, what it means, how it is overstated for political games and how it is good and necessary for world economy. Citing debt as you did reveals ignorance about macroeconomist and world markets.

Lol, Russia would love some debt about now, but no one wants anything Russia offers as a result of prior default in 98 and unstable economy.

Russia is now trying to auction bonds or launch debt sale, but the rate they have to pay and risk associated wont result in the number of takers Russia needs or ability to general sales Russia needs.

Haha, carry in with your doom and gloom and reading zerohedge and breitbart if it makes you feel better about YOUR situation. Jeez, our food stamp folks are driving around in BMWs living in 2,000 sq foot properties talking on their new iPhones watching HD cable TV. And they have free health care!

Live is great here!!!

F430murci

My God do you really believe food stamp folks driving around in BMWs living in 2,000 sq. foot properties talking on their new iPhones with HD cable TV and free health care is something that can be sustained? Less than half of the US population currently has a job and the Baby Boomers are retiring at a rate of 10,000 a day. The money to do this cant keep being created out of thin air and add to our national debt forever, people actually have to be working to support these benefits. Economically this is a frightening situation, to me any way. I am fascinated to read your thread covering your perception and thoughts regarding US debt, please direct me to it.

Robert its a relief to know that at least one other person doesn't think it's good that so many in USA are living this way. Sometimes I think F430murci is having everybody on because I can't believe he would seriously condone the continuation of this very troublesome trend and see it as something to cheerlead about.

And I would also be interested to read his interpretation of the US debt which I must have missed because I haven't seen it in any other thread.

Haha, you guys lack knowledge and ability to research. I should charge for this or you should go to a business school, get an MBA or something if you really wanna know.

First, I do not like having to pay for and Cary dead weight (entitlement people), but I said it is hard for me to legitimately complain about amount of taxes I pay because I have been given opportunity to make enough to pay such a large amount of taxes.

Debt (abbreviated version)

Public debt is the important number. US public bedt is somewhere around 12.5 or about 75 % percent of GDP which is safe and acceptable ratio. 90% ratio is critical stage for developed, 70% ratio is critical stage for emerging market countries.

Our politicians and everyone with some business sense knows that public debt is the important figure, but media and politcak pundits throw around total US or national debt to rally base.

Public debt is a great means to get extra funds to invest in their economic growth. Public debt is a safe way for foreigners to invest in a country's growth by buying government bonds. This investment allows US to generate economic growth internally.

Our T bills are in demand because they are safer than other investment alternatives to countries needing returns, but safety for large cash reserves. Other countries need, are dependent upon dependent and rely upon the availability of US debt for their own economic issues. I explained this and public v, nation ad naseum in other posts.

BTW, you unemployment figures are comparable to the use of national instead of public debt to create confusion and alarm. Yep, many 16 to 18 year olds and college age children are not having to work now and are focusing on education. This is a positive families are in the position now. Older Americans who suddenly had to supplement their 2008 investment:retirement losses in 09, 10 and 11 no longer are seeking employment because their pensions are back to and above 2007 levels. This is a positive.

Things are fine and will continue to be fine.

You have got to be kidding me, I was hoping for so much more from you, this is senseless babbling; from what University did you graduate? Are you drunk? The ability to spell I guess is not an important element in the definition of your position. These concepts are so poorly fashioned I find it difficult to fathom what you are trying to express. Go to business school? Did you get some money from Mommy and Daddy; I doubt an intellect like yours has accumulated substantial wealth through participation in the business community.

I find no benefit to continuing this dialogue.

Haha, my iphone typing dies sucketh errse . . .

JD/MBA, Series 7 & 66, securities lawyer since 95, wife a investment banker for BofA/ML n GCIB. . . . She a Russian. 5 years at Novosibirisk U, MBA Yale and her BofA existence is in debt, underwriting debt and providing advisory services for m&a generally related Russian investment/market.

Don't no much about know money stuff and luckily no won really reeds lawlerly pontification close enough to realize we generally can't even spell our names correctly. LSs too busy teaching art of block billing and churning (courses coded intro to DLA Piper I and advanced DLA Piper II) so no time for spelling courses.

Attacking form over substance impressive!

LOL, thanks for letting us know you won't " dialogue" with me any longer. Otherwise, I would be several shades of blue holding my breathe waiting. BTW, you didn't have to participate in the first instant so no need to explain you prefer to take "it" home and play with yourself.

[lovetotravel]

F430murci

I covered US debt ad naseum in another thread, what it means, how it is overstated for political games and how it is good and necessary for world economy. Citing debt as you did reveals ignorance about macroeconomist and world markets.

Lol, Russia would love some debt about now, but no one wants anything Russia offers as a result of prior default in 98 and unstable economy.

Russia is now trying to auction bonds or launch debt sale, but the rate they have to pay and risk associated wont result in the number of takers Russia needs or ability to general sales Russia needs.

Haha, carry in with your doom and gloom and reading zerohedge and breitbart if it makes you feel better about YOUR situation. Jeez, our food stamp folks are driving around in BMWs living in 2,000 sq foot properties talking on their new iPhones watching HD cable TV. And they have free health care!

Live is great here!!!

F430murci

My God do you really believe food stamp folks driving around in BMWs living in 2,000 sq. foot properties talking on their new iPhones with HD cable TV and free health care is something that can be sustained? Less than half of the US population currently has a job and the Baby Boomers are retiring at a rate of 10,000 a day. The money to do this can’t keep being created out of thin air and add to our national debt forever, people actually have to be working to support these benefits. Economically this is a frightening situation, to me any way. I am fascinated to read your thread covering your perception and thoughts regarding US debt, please direct me to it.

I think the correct population to employment ratio is about 58% for the US. Right in there with most other developed countries. But definitely above 50%. The top 45 or so aren't countries I'd want to emulate either, for the most part.

http://data.worldbank.org/indicator/SL.EMP.TOTL.SP.ZS?order=wbapi_data_value_2012+wbapi_data_value+wbapi_data_value-last&sort=desc

[Robert2006]

F430murci

I covered US debt ad naseum in another thread, what it means, how it is overstated for political games and how it is good and necessary for world economy. Citing debt as you did reveals ignorance about macroeconomist and world markets.

Lol, Russia would love some debt about now, but no one wants anything Russia offers as a result of prior default in 98 and unstable economy.

Russia is now trying to auction bonds or launch debt sale, but the rate they have to pay and risk associated wont result in the number of takers Russia needs or ability to general sales Russia needs.

Haha, carry in with your doom and gloom and reading zerohedge and breitbart if it makes you feel better about YOUR situation. Jeez, our food stamp folks are driving around in BMWs living in 2,000 sq foot properties talking on their new iPhones watching HD cable TV. And they have free health care!

Live is great here!!!

F430murci

My God do you really believe food stamp folks driving around in BMWs living in 2,000 sq. foot properties talking on their new iPhones with HD cable TV and free health care is something that can be sustained? Less than half of the US population currently has a job and the Baby Boomers are retiring at a rate of 10,000 a day. The money to do this can’t keep being created out of thin air and add to our national debt forever, people actually have to be working to support these benefits. Economically this is a frightening situation, to me any way. I am fascinated to read your thread covering your perception and thoughts regarding US debt, please direct me to it.

Robert its a relief to know that at least one other person doesn't think it's good that so many in USA are living this way. Sometimes I think F430murci is having everybody on because I can't believe he would seriously condone the continuation of this very troublesome trend and see it as something to cheerlead about.

And I would also be interested to read his interpretation of the US debt which I must have missed because I haven't seen it in any other thread.

I hear you it is very frustrating to see these concepts being promoted. A welfare state with fewer workers than benefit takers can’t go on forever, it’s mathematically impossible. I’m all for a safety net for people that need help but the system in the US is being abused, an enormous percentage receiving benefits are just lazy people taking advantage of the system.

These individuals are foolish, do they really believe the government cares about providing for them, they are in fantasy land. When the rug gets pulled out from under them and one day it will, then what will they do? True security is the acquisition of valuable skills; you will never need to be concerned with being able to provide for your needs when you’re in possession of a package of valuable skills that benefits your community.

The choice is clear, take the crumbs from the government or become prosperous and secure trading your skills for wealth.

[cloudhopper]

you can't fuel an economy on debt

Actually you can, for a while. Ever since president Nixon stopped settling trade deficits with gold any country running a trade surplus with the US has chosen to buy UST in order to keep their own currency from appreciating against the USD. This has worked well as long as interest rates have declined, as they have over the last 30 years, and the debt continually refinanced. And as long as the other central banks play ball. Now real interest rates are going negative and this global bubble is beginning to deflate massively in the face of unrepayable debt, despite the eagerly adopted theories of the "modern monetarists", who will soon discover that you can print money and debt but not real wealth.

What exactly will the "modern economists...soon discover" that will fulfill someone's prophecy that printing money and debt equals no real wealth?

It certainly is not a question of whether increasing demand or increasing supply of goods and services will resolve negative interest rates. Since 1927 interest rates in the U.S. have gone negative several times totaling some 25 years. The resolution has always been the traditional one, i.e., to either increase demand or supply of goods and services according to the specific circumstances of the decline in rates.

The traditional approaches no longer apply which is a major reason I'm asking you to ante up and say whether you recognize the fact. It's the price of money that applies to the present circumstance. It's the low cost of money. It's what Ben Bernanke has called the "global savings glut."

Which is that since 2000, China's foreign currency reserves have gone from $159 billion to $3.2 trillion, Saudi Arabia's have gone from $16 billion to $540 billion, and Russia's have gone from $9 billion to $462 billion. Meanwhile, over the same time period, China's demand for U.S. Treasuries has gone from $60 billion to more than $1.1 trillion. And when you take all of the oil-exporting nations together, their holdings of U.S. debt have gone from $48 billion to $259 billion.

In short, the principal reasons real interest rates are so low, even negative in many instances, is because of a mismatch between supply and demand for money. Goods and services have little to do with it directly.

The growing supply of funds from the emerging markets such as China and the oil-producing countries has simply overwhelmed the capacity of established bond markets. China for one has not carried its share of the solution, mostly because it cannot weigh in in the big way it needs to. Its new embryonic Dim Sum bond market last year experienced a paltry $29 billion of Dim Sum bonds traded, compared to America's $36 trillion market.

It's excess savings that are driving interest rates down, not debt, not printing money. The demand for money exits as does the supply. The solution is to do something with the piles of money these governments keep accumulating, such as investing productively in infrastructure (with China as the model of how not to do it).

Hogwash. What is mismatched is the supply and demand for credit. There is simply inadequate demand for credit by credit-worthy borrowers to fund profit making enterprise. There is no more capacity to increase consumption due to debt saturation, which reaches its peak as rates go to zero.

How do you think insurance companies and retirement funds will be able to make payouts as their investment returns drop toward zero? As more and more debt is defaulted on you can expect the velocity of money to continue its present decline as people sensibly hoard cash.

What malinvestment has exponentially given will now be taken away with an equally exponential decline in the supply of money and credit. No amount of printing (if that's what the CBs try) can stop it.

[BATHIK]

From yesterday's Real time with Bill Maher: "Bombing is achieving its purpose - defense stocks are through the roof"

[Publicus]

you can't fuel an economy on debt

Actually you can, for a while. Ever since president Nixon stopped settling trade deficits with gold any country running a trade surplus with the US has chosen to buy UST in order to keep their own currency from appreciating against the USD. This has worked well as long as interest rates have declined, as they have over the last 30 years, and the debt continually refinanced. And as long as the other central banks play ball. Now real interest rates are going negative and this global bubble is beginning to deflate massively in the face of unrepayable debt, despite the eagerly adopted theories of the "modern monetarists", who will soon discover that you can print money and debt but not real wealth.

What exactly will the "modern economists...soon discover" that will fulfill someone's prophecy that printing money and debt equals no real wealth?

It certainly is not a question of whether increasing demand or increasing supply of goods and services will resolve negative interest rates. Since 1927 interest rates in the U.S. have gone negative several times totaling some 25 years. The resolution has always been the traditional one, i.e., to either increase demand or supply of goods and services according to the specific circumstances of the decline in rates.

The traditional approaches no longer apply which is a major reason I'm asking you to ante up and say whether you recognize the fact. It's the price of money that applies to the present circumstance. It's the low cost of money. It's what Ben Bernanke has called the "global savings glut."

Which is that since 2000, China's foreign currency reserves have gone from $159 billion to $3.2 trillion, Saudi Arabia's have gone from $16 billion to $540 billion, and Russia's have gone from $9 billion to $462 billion. Meanwhile, over the same time period, China's demand for U.S. Treasuries has gone from $60 billion to more than $1.1 trillion. And when you take all of the oil-exporting nations together, their holdings of U.S. debt have gone from $48 billion to $259 billion.

In short, the principal reasons real interest rates are so low, even negative in many instances, is because of a mismatch between supply and demand for money. Goods and services have little to do with it directly.

The growing supply of funds from the emerging markets such as China and the oil-producing countries has simply overwhelmed the capacity of established bond markets. China for one has not carried its share of the solution, mostly because it cannot weigh in in the big way it needs to. Its new embryonic Dim Sum bond market last year experienced a paltry $29 billion of Dim Sum bonds traded, compared to America's $36 trillion market.

It's excess savings that are driving interest rates down, not debt, not printing money. The demand for money exits as does the supply. The solution is to do something with the piles of money these governments keep accumulating, such as investing productively in infrastructure (with China as the model of how not to do it).

Hogwash. What is mismatched is the supply and demand for credit. There is simply inadequate demand for credit by credit-worthy borrowers to fund profit making enterprise. There is no more capacity to increase consumption due to debt saturation, which reaches its peak as rates go to zero.

How do you think insurance companies and retirement funds will be able to make payouts as their investment returns drop toward zero? As more and more debt is defaulted on you can expect the velocity of money to continue its present decline as people sensibly hoard cash.

What malinvestment has exponentially given will now be taken away with an equally exponential decline in the supply of money and credit. No amount of printing (if that's what the CBs try) can stop it.

Denial is not a sound or healthy approach.

I'd noted the U.S. and other economies had been through the cycle of zero or negative real interest rates several times during the 20th century. The U.S. economy and all the others that addressed it cognitively and realistically are still here.

The new development is the massive global savings glut that former Fed Chairman Ben Bernanke identified and pointed out during his term. The governments I cited in my post above need to put the money they have in cold storage to work in infrastructure across the board, in quality of government services such as in education, in social security programs and the like.

No one needs to find anyone who's credit worthy, as if that were anyway such a tough task.

One side in this discussion is obsessed with debt debt debt while the side I speak from wants to get on to address the real and current reality of a global savings glut of a couple trillion dollars being held under lock and key that's holding up the works.

[craigt3365]

A few off topic and bickering posts have been removed from view. Please show respect to others and stay on topic.

[Publicus]

One side in this discussion is obsessed with debt debt debt while the side I speak from wants to get on to address the real and current reality of a global savings glut of a couple trillion dollars being held under lock and key that's holding up the works.

Yes well unfortunately the debt side is 25 times the size of the 'locked down global savings glut' that will get sucked away like oxygen in a fire once real interest rates begin to rise again, as they inevitably must.

I do agree with you that the USD will be the last currency standing, but not for long thereafter.

The following chart by the McKinsey Global Institute citing the IMF and the World Bank incinerates anything and everything I've seen from the far out global chaos and disorder people who secretly dress in their Mad Max costumes at their exclusive meetings where they discuss their imagined coming destruction of the existing global systems of economics and finance.

As interest rates resume their cyclical rise in the coming years the issue will be not enough savings and not enough capital to support the huge infrastructure expansion and development that already has begun in the emerging markets.

McKinsey notes the present time of massive infrastructure investment going forward to 2030 is akin to the Second Industrial Revolution and also the United States' reconstruction of post World War II Europe. Cyclical Interest rates will rise (again) because savings will not stay abreast of the massive demand for capital.

No serious person expects the United States Government to default on its debts. The U.S. will have some inflation in the coming years as the very acceptable price of completing its recovery from the 2008 debacle. The USD$ will strengthen and this will be of enormous consequence to the chaos and disorder people of the Austrian School of Mad Max Economics and to their irrepressible disciples around here.

A strong USD$ is good news for some countries, such as Brazil, bad news for other countries such as China. Russia this year to date has already lost 20% of the value of the Ruble against the USD$ and the Rubble will tank as the dollar newly appreciates and as the U.S. welcomes a needed period of a mild corrective inflation. India is in its usual muddle, meaning the Brics have already begun to go their own diverse ways.

The CCP Boyz in Beijing peg the Yuan to the USD$ so they're going to have to accept the stronger dollar even as it means losing much of their mercantile trade advantage, a further slowdown in rapidly slowing growth, and an increase in unemployment at home. It's been said that the only thing to fear more than a rising China is a falling China so the world shall see what the reaction is of the CCP Boyz.

Oh, did I mention the future is in infrastructure?

Emerging market infrastructure that must to the U.S. and Europe because that's where the biggest and deepest capital markets are, by far. No one else comes remotely close.

[Asiantravel]

Preparing for the Collapse of the Petrodollar System

Once you understand this “dollars for oil” arrangement, I believe that it will provide you with a more accurate understanding of what motivates America’s foreign policy If you have never heard of the petrodollar system, it would not surprise me. It is certainly not a topic that makes it's way out of Washington and Wall Street circles too often. The mainstream media rarely, if ever, discusses the inner workings of the petrodollar system and how it has motivated, and even guided, America's foreign policy in the Middle East for the last several decades.

http://ftmdaily.com/preparing-for-the-collapse-of-the-petrodollar-system/

Edited September 28, 2014 by Asiantravel

[Loptr]

So, the old "petrodollar" and "oil" tinfoil hat stuff again, huh? If the US was in it for oil, it would have taken Iraq's oil.

The US is in it to kill Islamists. It has been ever since 9/11 when the entire country had to watch on colored television as many people jumped from extreme heights out of those buildings rather than being burned to death.

All 535 members of the US Congress got to vote on this new campaign and the majority in both Houses said "yes." They have to run for re-election, and getting re-elected is job #1. Their constituents, the American people, want these attacks so the answer is politics.

The American people don't like wars with boots on the ground against people who avoid defeat by staying out of uniform and hiding among civilians. But they do like these air strikes against these Islamists.

9/11. Never forget.

In case you missed it, the title of the thread is "Protecting the petrodollar: America gears up for a long war" Please do try to keep up...

You are entitled to your opinion... And I will be nice enough to not rub your nose in it when it in fact takes place... Some like to ridicule those that actually do research into a topic before making a comment, while others like to throw cheap shots from the peanut gallery... If you were to spend 30 minutes researching the topic, you would not be as cavalier in your attitude... But like so many Americans that believe everything that is portrayed in the media as "truth", you will only have yourself to blame with the shit hits the fan... Some people read, others just bleat...

BTW, just what is the reason for the US to begin air strikes into Syria and don't play the ISIS card as international media and the Iraqi government themselves state that ISIS is nothing but a CIA operation?

http://www.nytimes.com/2014/09/21/world/middleeast/suspicions-run-deep-in-iraq-that-cia-and-the-islamic-state-are-united.html

Your final line is quite touching... sniff, sniff... Especially considering the US was complicit in the attack... Or do you know what is in the 28 redacted pages in the 9/11 Commission report?

Edited September 28, 2014 by Loptr

[Loptr]

F430murci

I covered US debt ad naseum in another thread, what it means, how it is overstated for political games and how it is good and necessary for world economy. Citing debt as you did reveals ignorance about macroeconomist and world markets.

Lol, Russia would love some debt about now, but no one wants anything Russia offers as a result of prior default in 98 and unstable economy.

Russia is now trying to auction bonds or launch debt sale, but the rate they have to pay and risk associated wont result in the number of takers Russia needs or ability to general sales Russia needs.

Haha, carry in with your doom and gloom and reading zerohedge and breitbart if it makes you feel better about YOUR situation. Jeez, our food stamp folks are driving around in BMWs living in 2,000 sq foot properties talking on their new iPhones watching HD cable TV. And they have free health care!

Live is great here!!!

F430murci

My God do you really believe food stamp folks driving around in BMWs living in 2,000 sq. foot properties talking on their new iPhones with HD cable TV and free health care is something that can be sustained? Less than half of the US population currently has a job and the Baby Boomers are retiring at a rate of 10,000 a day. The money to do this can’t keep being created out of thin air and add to our national debt forever, people actually have to be working to support these benefits. Economically this is a frightening situation, to me any way. I am fascinated to read your thread covering your perception and thoughts regarding US debt, please direct me to it.

Robert its a relief to know that at least one other person doesn't think it's good that so many in USA are living this way. Sometimes I think F430murci is having everybody on because I can't believe he would seriously condone the continuation of this very troublesome trend and see it as something to cheerlead about.

And I would also be interested to read his interpretation of the US debt which I must have missed because I haven't seen it in any other thread.

I hear you it is very frustrating to see these concepts being promoted. A welfare state with fewer workers than benefit takers can’t go on forever, it’s mathematically impossible. I’m all for a safety net for people that need help but the system in the US is being abused, an enormous percentage receiving benefits are just lazy people taking advantage of the system.

These individuals are foolish, do they really believe the government cares about providing for them, they are in fantasy land. When the rug gets pulled out from under them and one day it will, then what will they do? True security is the acquisition of valuable skills; you will never need to be concerned with being able to provide for your needs when you’re in possession of a package of valuable skills that benefits your community.

The choice is clear, take the crumbs from the government or become prosperous and secure trading your skills for wealth.

This is typical of Krugman acolytes that keep bleating that debt doesn't matter... The Keynesian's world is not grounded in reality...

History has a nasty habit of repeating itself as humans have proven time and time again that they cannot learn from their ancestor's mistakes... Every empire throughout history that has devalued it's currency to support an ever-bloating bureaucracy has failed... Every fiat currency down through history has failed... Not some, every one... Every "currency" on the planet today is a fiat currency, backed by nothing but the "good faith" of the issuer...

Edited September 28, 2014 by Loptr

[Asiantravel]

F430murci

I covered US debt ad naseum in another thread, what it means, how it is overstated for political games and how it is good and necessary for world economy. Citing debt as you did reveals ignorance about macroeconomist and world markets.

Lol, Russia would love some debt about now, but no one wants anything Russia offers as a result of prior default in 98 and unstable economy.

Russia is now trying to auction bonds or launch debt sale, but the rate they have to pay and risk associated wont result in the number of takers Russia needs or ability to general sales Russia needs.

Haha, carry in with your doom and gloom and reading zerohedge and breitbart if it makes you feel better about YOUR situation. Jeez, our food stamp folks are driving around in BMWs living in 2,000 sq foot properties talking on their new iPhones watching HD cable TV. And they have free health care!

Live is great here!!!

F430murci

My God do you really believe food stamp folks driving around in BMWs living in 2,000 sq. foot properties talking on their new iPhones with HD cable TV and free health care is something that can be sustained? Less than half of the US population currently has a job and the Baby Boomers are retiring at a rate of 10,000 a day. The money to do this can’t keep being created out of thin air and add to our national debt forever, people actually have to be working to support these benefits. Economically this is a frightening situation, to me any way. I am fascinated to read your thread covering your perception and thoughts regarding US debt, please direct me to it.

Robert its a relief to know that at least one other person doesn't think it's good that so many in USA are living this way. Sometimes I think F430murci is having everybody on because I can't believe he would seriously condone the continuation of this very troublesome trend and see it as something to cheerlead about.

And I would also be interested to read his interpretation of the US debt which I must have missed because I haven't seen it in any other thread.

I hear you it is very frustrating to see these concepts being promoted. A welfare state with fewer workers than benefit takers can’t go on forever, it’s mathematically impossible. I’m all for a safety net for people that need help but the system in the US is being abused, an enormous percentage receiving benefits are just lazy people taking advantage of the system.

These individuals are foolish, do they really believe the government cares about providing for them, they are in fantasy land. When the rug gets pulled out from under them and one day it will, then what will they do? True security is the acquisition of valuable skills; you will never need to be concerned with being able to provide for your needs when you’re in possession of a package of valuable skills that benefits your community.

The choice is clear, take the crumbs from the government or become prosperous and secure trading your skills for wealth.

This is typical of Krugman acolytes that keep bleating that debt doesn't matter... The Keynesian's world is not grounded in reality...

History has a nasty habit of repeating itself as humans have proven time and time again that they cannot learn from their ancestor's mistakes... Every empire throughout history that has devalued it's currency to support an ever-bloating bureaucracy has failed... Every fiat currency down through history has failed... Not some, every one... Every "currency" on the planet today is a fiat currency, back by nothing but the "good faith" of the issuer...

" There is nothing new in the world except the history you do not know."

Harry S. Truman

[Publicus]

This is typical of Krugman acolytes that keep bleating that debt doesn't matter... The Keynesian's world is not grounded in reality...

History has a nasty habit of repeating itself as humans have proven time and time again that they cannot learn from their ancestor's mistakes... Every empire throughout history that has devalued it's currency to support an ever-bloating bureaucracy has failed... Every fiat currency down through history has failed... Not some, every one... Every "currency" on the planet today is a fiat currency, backed by nothing but the "good faith" of the issuer...

"Every "currency" on the planet today is a fiat currency, backed by nothing but the "good faith" of the issuer... "

That's because people on this planet have evolved in this direction, rationally and for good reason as is clearly displayed in the historical record.

Without money where would everyone on the planet be? Printing money is necessarily done by fiat and as a fiat - there's nothing inherently wrong with printed money. Ninety-nine percent accept that as a given. Reactionary extreme right wingers long for the old days of bartering, the gold standard, no USA in the world, neither a lender nor a borrower be.

The barter system is ineffective, outdated, awkward, cumbersome, passe'.

The gold standard is inadequate, insufficient, volatile.

The long and the short of it is that axe grinding malcontents necessarily are not people of good faith.

[BATHIK]

people on this planet have evolved in this direction, rationally and for good reason

The same could be said for every civilization in history.

Debt driven growth is only 30-40 years old and could as well turn into an evolutionary dead end to be supplanted by something else.

[Publicus]

This is typical of Krugman acolytes that keep bleating that debt doesn't matter... The Keynesian's world is not grounded in reality...

History has a nasty habit of repeating itself as humans have proven time and time again that they cannot learn from their ancestor's mistakes... Every empire throughout history that has devalued it's currency to support an ever-bloating bureaucracy has failed... Every fiat currency down through history has failed... Not some, every one... Every "currency" on the planet today is a fiat currency, back by nothing but the "good faith" of the issuer...

" There is nothing new in the world except the history you do not know."

Harry S. Truman

"There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know."

Donald Rumsfeld

[Loptr]

people on this planet have evolved in this direction, rationally and for good reason

The same could be said for every civilization in history.

Debt driven growth is only 30-40 years old and could as well turn into an evolutionary dead end to be supplanted by something else.

Monetary systems have a typical lifespan of roughly 40 years... The current system has been in place since Nixon dismembered the Breton Woods agreement and took the US off the gold standard in 1971, so we are due for a new paradigm...

[Asiantravel]

This is typical of Krugman acolytes that keep bleating that debt doesn't matter... The Keynesian's world is not grounded in reality...

History has a nasty habit of repeating itself as humans have proven time and time again that they cannot learn from their ancestor's mistakes... Every empire throughout history that has devalued it's currency to support an ever-bloating bureaucracy has failed... Every fiat currency down through history has failed... Not some, every one... Every "currency" on the planet today is a fiat currency, backed by nothing but the "good faith" of the issuer...

"Every "currency" on the planet today is a fiat currency, backed by nothing but the "good faith" of the issuer... "

That's because people on this planet have evolved in this direction, rationally and for good reason as is clearly displayed in the historical record.

Without money where would everyone on the planet be? Printing money is necessarily done by fiat and as a fiat - there's nothing inherently wrong with printed money. Ninety-nine percent accept that as a given. Reactionary extreme right wingers long for the old days of bartering, the gold standard, no USA in the world, neither a lender nor a borrower be.

The barter system is ineffective, outdated, awkward, cumbersome, passe'.

The gold standard is inadequate, insufficient, volatile.

The long and the short of it is that axe grinding malcontents necessarily are not people of good faith.

why has every fiat "currency" on the planet failed ? Two reasons primarily: leverage and promises which sounds all too like the USA

In a fiat money system, banks always find ways to expand credit and leverage to unsustainable levels

as in the USA today. Currently the banks do this via fractional reserve lending and derivatives. ( Derivatives now stand at more than 600 trillion dollars ) This creates bubbles! When these leverage-induced bubbles pop, banks either default on their obligations, or the government bails them out. Since the banks are politically powerful, they can almost always make the government tax people, issue bonds, or simply print the cash to get their bailout.

In a fiat money system, governments always promise more than they can deliver. To make up the difference, the government can engage in “deficit spending” or simply print cash and give it to the people or, as we’ve seen lately, give easy loans or subsidies to their cronies. When governments can’t fulfill their obligations in real terms, they attempt to provide it in nominal terms – they simply print money to make up the difference.

[Asiantravel]

This is typical of Krugman acolytes that keep bleating that debt doesn't matter... The Keynesian's world is not grounded in reality...

History has a nasty habit of repeating itself as humans have proven time and time again that they cannot learn from their ancestor's mistakes... Every empire throughout history that has devalued it's currency to support an ever-bloating bureaucracy has failed... Every fiat currency down through history has failed... Not some, every one... Every "currency" on the planet today is a fiat currency, back by nothing but the "good faith" of the issuer...

" There is nothing new in the world except the history you do not know."

Harry S. Truman

"There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know."

Donald Rumsfeld

the same Donald ................?

"I am not going to give you a number for it because it's not my business to do intelligent work." --Defense Secretary Donald Rumsfeld, asked to estimate the number of Iraqi insurgents while testifying before Congress, Feb. 16, 2005

[Johpa]

How do you think insurance companies and retirement funds will be able to make payouts as their investment returns drop toward zero? As more and more debt is defaulted on you can expect the velocity of money to continue its present decline as people sensibly hoard cash.

Insurance companies and retirement funds are not limited to investing in bank savings accounts that now return less than 1%. That is reserved for the pathetic working class who can not afford risk with what little that remains after taxes and other costs. The big investors still have the large real estate deals and access to hedge funds returning double digits with reliability. The velocity of money continues to decline as a result of income inequality as the vast majority of people, the 95%, have so little to spend.

[Publicus]

people on this planet have evolved in this direction, rationally and for good reason

The same could be said for every civilization in history.

Debt driven growth is only 30-40 years old and could as well turn into an evolutionary dead end to be supplanted by something else.

The Industrial Revolution set the world on its current dynamic course from the static flat line life of the Old World.

Stay the course.

Debt obsessed neo-Luddites not withstanding.

Credit Viktor Hachmang

[sirineou]

It's always so funny view the post that comment that America's appetite for oil drives it to fight in the Middle East and elsewhere. For those who are not 'in the know' The USA has now become the world's largets producer of Petroleum products in the world, first natural gas and soon crude oil, all due to 'fracking' (another story in itself). If America wanted oil so much it could have just stayed in Iraq, but it did not.

Now I'm certainly cautious about entering another conflict in the ME, most Americans are, but when factions and so called Islamic states excecute your citizens on video in crude fashion, you are going to get a 'cause and effect' result. Any other country would react the same way when their citizens have been harmed....

It's not 'brain surgery' but everyone has to lable every thing a country does for a conspiracy theory.

So your problem is that they do it on video, It is fine id they do it it drones in the middle of the night?

[Publicus]

This is typical of Krugman acolytes that keep bleating that debt doesn't matter... The Keynesian's world is not grounded in reality...

History has a nasty habit of repeating itself as humans have proven time and time again that they cannot learn from their ancestor's mistakes... Every empire throughout history that has devalued it's currency to support an ever-bloating bureaucracy has failed... Every fiat currency down through history has failed... Not some, every one... Every "currency" on the planet today is a fiat currency, backed by nothing but the "good faith" of the issuer...

"Every "currency" on the planet today is a fiat currency, backed by nothing but the "good faith" of the issuer... "

That's because people on this planet have evolved in this direction, rationally and for good reason as is clearly displayed in the historical record.

Without money where would everyone on the planet be? Printing money is necessarily done by fiat and as a fiat - there's nothing inherently wrong with printed money. Ninety-nine percent accept that as a given. Reactionary extreme right wingers long for the old days of bartering, the gold standard, no USA in the world, neither a lender nor a borrower be.

The barter system is ineffective, outdated, awkward, cumbersome, passe'.

The gold standard is inadequate, insufficient, volatile.

The long and the short of it is that axe grinding malcontents necessarily are not people of good faith.

why has every fiat "currency" on the planet failed ? Two reasons primarily: leverage and promises which sounds all too like the USA

In a fiat money system, banks always find ways to expand credit and leverage to unsustainable levels

as in the USA today. Currently the banks do this via fractional reserve lending and derivatives. ( Derivatives now stand at more than 600 trillion dollars ) This creates bubbles! When these leverage-induced bubbles pop, banks either default on their obligations, or the government bails them out. Since the banks are politically powerful, they can almost always make the government tax people, issue bonds, or simply print the cash to get their bailout.

In a fiat money system, governments always promise more than they can deliver. To make up the difference, the government can engage in “deficit spending” or simply print cash and give it to the people or, as we’ve seen lately, give easy loans or subsidies to their cronies. When governments can’t fulfill their obligations in real terms, they attempt to provide it in nominal terms – they simply print money to make up the difference.

Without accepting anything you posted, I'd ask you to present your alternative system, plan, design, scheme, to succeed the long standing fiat system. And of how to get to it.

You've posted a series of declaratory statements that while they are essentially connected, they don't take us anywhere, i.e., an alternative to the fiat system.

Do you guys want to replace the fiat system entirely? Or replace the existing USD system by installing a new fiat system, which would seem unlikely to me as you roundly denounce the fiat system per se, its debt especially. You guys denounce denounce denounce so what do you propose?

[BATHIK]

The Industrial Revolution set the world on its current dynamic course from the static flat line life of the Old World.

Industrial revolution is not forever either.

Our current model of development is simply unsustainable. One reason is that it assumes our resources are unlimited. Another reason is that it's now fed by runway debt creation. Yet another reason is demographics - all "developed" societies do not reproduce enough to survive.

The question is not whether or not there will be an end to this party, the question is who is going to be better prepared for the transition to the next step.

[BATHIK]

You guys denounce denounce denounce so what do you propose?

It's a good question but our apparent inability to predict the future does not mean it's not going to happen. Among the known unwknowns this one is truly unknown, predictions are a b*tch.

On the whole, we are no more entitled to eternal life and prosperity than Romans, Ottomans, Soviets etc.

[F430murci]

F430murci

I covered US debt ad naseum in another thread, what it means, how it is overstated for political games and how it is good and necessary for world economy. Citing debt as you did reveals ignorance about macroeconomist and world markets.

Lol, Russia would love some debt about now, but no one wants anything Russia offers as a result of prior default in 98 and unstable economy.

Russia is now trying to auction bonds or launch debt sale, but the rate they have to pay and risk associated wont result in the number of takers Russia needs or ability to general sales Russia needs.

Haha, carry in with your doom and gloom and reading zerohedge and breitbart if it makes you feel better about YOUR situation. Jeez, our food stamp folks are driving around in BMWs living in 2,000 sq foot properties talking on their new iPhones watching HD cable TV. And they have free health care!

Live is great here!!!

F430murci

My God do you really believe food stamp folks driving around in BMWs living in 2,000 sq. foot properties talking on their new iPhones with HD cable TV and free health care is something that can be sustained? Less than half of the US population currently has a job and the Baby Boomers are retiring at a rate of 10,000 a day. The money to do this cant keep being created out of thin air and add to our national debt forever, people actually have to be working to support these benefits. Economically this is a frightening situation, to me any way. I am fascinated to read your thread covering your perception and thoughts regarding US debt, please direct me to it.

Robert its a relief to know that at least one other person doesn't think it's good that so many in USA are living this way. Sometimes I think F430murci is having everybody on because I can't believe he would seriously condone the continuation of this very troublesome trend and see it as something to cheerlead about.

And I would also be interested to read his interpretation of the US debt which I must have missed because I haven't seen it in any other thread.

I hear you it is very frustrating to see these concepts being promoted. A welfare state with fewer workers than benefit takers cant go on forever, its mathematically impossible. Im all for a safety net for people that need help but the system in the US is being abused, an enormous percentage receiving benefits are just lazy people taking advantage of the system.

These individuals are foolish, do they really believe the government cares about providing for them, they are in fantasy land. When the rug gets pulled out from under them and one day it will, then what will they do? True security is the acquisition of valuable skills; you will never need to be concerned with being able to provide for your needs when youre in possession of a package of valuable skills that benefits your community.

The choice is clear, take the crumbs from the government or become prosperous and secure trading your skills for wealth.

This is typical of Krugman acolytes that keep bleating that debt doesn't matter... The Keynesian's world is not grounded in reality...

History has a nasty habit of repeating itself as humans have proven time and time again that they cannot learn from their ancestor's mistakes... Every empire throughout history that has devalued it's currency to support an ever-bloating bureaucracy has failed... Every fiat currency down through history has failed... Not some, every one... Every "currency" on the planet today is a fiat currency, backed by nothing but the "good faith" of the issuer...

No, debt does matter. My sole point is from an economic perspective the key ratio is public debt to GDP. Citing national debt of $ 17 tr. is more media "good headlines" hogwash and a political tool to rally base.

I have not looked at figure recently, but I believe public debt is around $ 12.5 tr. and at a ratio of about % 70 to 75 % of GDP. The critical stage for developed economies is 90 %.

US is still well below 90 % and we have seen developed economies such as Japan function with much higher ratios than 90 %. Our +/- 70 % ratio is not cause for alarm at this time.

RE: US debt/risk v. Russia debt/risk

Large institutional investors and world governments much smarter and armed with more facts than you are I continue to purchase large blocks of US Treasuries at very low interests rates. This is a great indication of the risk of the investment and current state of US economy as opposed to Zerohedge, breitbart.com and those on here salivating to see the US fail.

Russia has a low debt ratio because only the few are willing accept the risk on what they have to offer. Very, very few large investors with fiduciary obligations or in charge of government funds are willing to risk large investments in Russian debt even at much higher rates. Too risky, uncertain and Russia has a history of default.

RE: Current Debt and Looking Forward

Thus far, the Fed has done an excellent job in exceedingly and unprecedented circumstances. The QEs accomplished exactly what the Fed needed to accomplish by filling large voids and shoring up reserves on both the US and on foreign balance sheets as a result of CMOs.

The economy has recovered sufficiently to now start reigning in both spending and debt. Candidly, US really did not want additional conflict and additional defense spending because it is counter to the direction we need to be heading as far as spending at the moment.

Nevertheless, we are where we are and hopefully the next administration can plug some of the "agenda" holes in our system Obama created.

Edited September 28, 2014 by F430murci

[F430murci]

How do you think insurance companies and retirement funds will be able to make payouts as their investment returns drop toward zero? As more and more debt is defaulted on you can expect the velocity of money to continue its present decline as people sensibly hoard cash.

Insurance companies and retirement funds are not limited to investing in bank savings accounts that now return less than 1%. That is reserved for the pathetic working class who can not afford risk with what little that remains after taxes and other costs. The big investors still have the large real estate deals and access to hedge funds returning double digits with reliability. The velocity of money continues to decline as a result of income inequality as the vast majority of people, the 95%, have so little to spend.

Much truth to some of this, except how insurance companies make bank . . . The disparity in income can an swill become a problem everywhere. I blame net and advancing technology more than anything. Very large blocks of corporate wealth and income are generated by companies with very small workforces. Small mom and pop brick and mortar businesses that used to employ non-professional and less educated work forces can no longer compete or survive. Brick and mortar that do survive compete through reduction in workforce and lower wages. Automation is replecing humans rom grocery stores to assembly lines.

Real estate as an investment option (flipping, rental and etc.) is no longer as accessible to middle class. One now has to have cash to purchase investment and rental property as mortgage access to 2nd, 3rd and etc. properties are scarce.

This is a world problem, not just a US problem.

Who does this impact? The lazy and those unwilling to worh hard and get advanced education and professional degrees.

[MJP]

How do you think insurance companies and retirement funds will be able to make payouts as their investment returns drop toward zero? As more and more debt is defaulted on you can expect the velocity of money to continue its present decline as people sensibly hoard cash.

Insurance companies and retirement funds are not limited to investing in bank savings accounts that now return less than 1%. That is reserved for the pathetic working class who can not afford risk with what little that remains after taxes and other costs. The big investors still have the large real estate deals and access to hedge funds returning double digits with reliability. The velocity of money continues to decline as a result of income inequality as the vast majority of people, the 95%, have so little to spend.

Much truth to some of this, except how insurance companies make bank . . . The disparity in income can an swill become a problem everywhere. I blame net and advancing technology more than anything. Very large blocks of corporate wealth and income are generated by companies with very small workforces. Small mom and pop brick and mortar businesses that used to employ non-professional and less educated work forces can no longer compete or survive. Brick and mortar that do survive compete through reduction in workforce and lower wages. Automation is replecing humans rom grocery stores to assembly lines.

Real estate as an investment option (flipping, rental and etc.) is no longer as accessible to middle class. One now has to have cash to purchase investment and rental property as mortgage access to 2nd, 3rd and etc. properties are scarce.

This is a world problem, not just a US problem.

Who does this impact? The lazy and those unwilling to worh hard and get advanced education and professional degrees.

Yet try finding a good plumber, eh?

You all live off the pathetic working class. They're the ones actually doing the real work.

[Publicus]

You guys denounce denounce denounce so what do you propose?

It's a good question but our apparent inability to predict the future does not mean it's not going to happen. Among the known unwknowns this one is truly unknown, predictions are a b*tch.

On the whole, we are no more entitled to eternal life and prosperity than Romans, Ottomans, Soviets etc.

I said propose, not predict.

If I'd wanted a prediction I could have gone to a fortune teller or visited a spirit house. If I'd wanted someone's wet dream I could reread the thread or any number of the posts from your side to any number of recent threads. Your side posts only a bizarre proliferation of outlander and eccentric predictions so what could make you think I would want yet another .

The drivel about "we" not being entitled to eternal life and referring to empires of history is sophomoric obfuscation that seeks to further deflect the legitimate question.

Your side seems not to recognize the Soviet Union was the last empire which betrays your misreading of history and of the modern world. I'd begun to suspect I'm dealing with a gang of nihilists yet none of you say or do anything to indicate it might be otherwise.

So again, what do you propose to succeed the present system that your side rails incessantly against?